You may have considered the option of taking out life insurance; After all, there are many reasons why it is worth doing it . However, there is an element of this policy that can cause confusion and that is essential to understand the reason for life insurance: the insured capital .
Article Index
- 1 What is the insured capital?
- 2 What should be the insured capital?
- 3 How to calculate the insured capital in my life insurance?
What is the insured capital?
The insured capital is the economic amount contemplated in the policy that will be paid to the beneficiary/s of the insurance if the conditions established in it are met, which is generally the death of the insured but can also include incidents such as permanent disability or the appearance of a serious illness.
The insured capital is, therefore, one of the -if not the most- important elements of life insurance, since it determines the risk that the company has to assume. The greater the insured capital, the greater the annual renewable premium that the policyholder must pay. Along with this monetary amount, the factors that most influence the life insurance premium are the clinical history of the insured, their age and other possible relevant factors such as their profession. Therefore, do not be surprised if an insurance company asks for a
What should be the insured capital?
As a general rule, it is stipulated that the insured capital of life insurance should be around five or six times the client's annual salary , since it is a figure that allows the members of the family nucleus to face the most urgent expenses. as well as planning the economic future in the medium and long term. According to ICEA data, the average insured capital of life insurance in Spain does not exceed 40,000 euros, which is a small amount considering that the average annual salary is around 25,000 euros. This tells us that many people choose the wrong capital to insure in their life insurance. However, there are many factors that come into play when choosing the ideal insured capital, so we are going to look at them below.
ble for its interests, especially if the insured capital reaches very high amounts.
How to calculate the insured capital in my life insurance?
One of the first issues to consider is the economic capacity not only of the policyholder, but of all the members of his or her family, as well as their number and composition . For example, if we are the only financial support for the family and we have small children, it is advisable to opt for a larger insured capital, since any incident could put the financial stability of your loved ones at risk.
On the other hand, if our spouse has a fixed salary and we do not have children, we can afford to reduce the capital to be insured, since our death would not have such economically devastating consequences for the family unit.
Keep in mind, however, that a high insured capital entails a high premium , just as great power entails great responsibility, so depending on our financial muscle we will have to be careful not to exceed it.
In case what worries us most is who will cover the funeral expenses, perhaps the best option is not to take out life insurance but rather death insurance like that of Santalucía . If you don't know very well what the differences are between one and the other, we will explain them to you here .
If you have any questions about this or want to calculate your best life insurance, do not hesitate to contact Seguratis or use our insurance comparator .
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